Thursday, April 30, 2009

A good write-up on today's business-like Putin-Tymoshenko meeting from AFP here.

Today's 'Kommersant' predicted earlier that Tymoshenko would propose formation of a new gas consortium to Putin.

Here are excerpts from the article:

"Mr. Oleksandr Hudyma [a BYuT parliamentary deputy and fuel and energy adviser to the PM] stated that the Ukrainian side intends to propose a joint project to increase the capacity of the Ukrainian gas transit system [GTS]. By reconstructing the Ivantsevychi-Dolyna pipeline and constructing a Bogorodchany- Uzhgorod pipeline, with minimal investments of the order of $350million, it will be possible to increase gas transit capacity by about 30Bn cubic meters of gas p.a. The new infrastructure would be managed on parity principles by 'Gazprom' and 'Naftogaz' - the joint project investors. [The capacity of the proposed Nord Stream Baltic pipeline is of a similar order - but its cost would almost certainly exceed $10Bn..LEvko]

'Naftohaz' press- secretary Valentyn Zemlyansky yesterday stated: "We greet the participation of Russia in the modernization of the GTS of the Ukraine, the form of this participation must be determined by the premiers of two countries".

Director of East European Gas Analysis Mikhail Korchemkin, commenting on the benefits, said, "Since the beginning of the year the consumption of Russian gas in the EU countries has reduced by almost 60% and there is no sense building new gas pipes [Nord stream, South stream..any other stream?]. Far more realistic to invite Gazprom to invest in the modernization of Ukrainian GTS, whilst preserving a low tariff for pumping gas."

Wednesday, April 29, 2009

The former US ambassador to Ukraine, Steven Pifer, considers there are four problems which his country could help Ukraine overcome. These are stimulation of the economy in financial crisis conditions, development of energy conservation and reduction of energy dependency on other countries, and lobbying Ukraine's interests on entry into NATO and the EC.

"But none of this will have any effect without a fourth component - development of a joint policy by the government and president of Ukraine.The USA are ready to act as mediator in this process.."says Pifer.

Pifer is correct to identify the harm being done by long-standing president/premier warring in Ukraine, but now Yushchenko's time is fast running out.

Meanwhile PoR and BYuT are still working on 'stitching up' the president by altering the consitution, allowing Tymoshenko to continue leading the government, and electing Viktor Yanukovych as president in parliament. But an article in PoR-leaning 'Segodnya' reckons there may not now be sufficient time for the creation of a 'PR-BYuT' coalition either - a deal must be 'wrapped up' by June at the very latest.

I've loosely translated some portions below:

Rumours about the speedy creation of a PR/BYuT coalition are again emerging, but the probability of success is by no means 100%, even though now both forces are close to agreement. Changes to the constitution, which must be the basis of understanding between Yanukovych and Tymoshenko, have already been agreed.

Having experienced a fall in her ratings, Tymoshenko has made large concessions to 'Regiony' on constitutional questions in order to avoid national presidential elections. Sources in both fractions confirm that voting for the president in the parliament is proposed. In this case the head of state will be Yanukovych, with somewhat increased powers in the comparison with the current president, Tymoshenko remaining premier.He would be deprived the right to assign governors, but the law courts would be returned under his control - all judges during his first term would be appointed by the President.

Furthermore, besides the heads of the Mministry of Foreign Affairs, National Bank of Ukraine, Ministry of Defense, Security Service, and Attorney General's Office, the Ministry of Internal Affairs would be added to president's remit - i.e., all the 'sylovyky' would be controlled by the president, [i.e. Yanukovych]. BYuT have also foregone their idea of carrying out elections of parliament into two stages.

Various fractions within PoR have different opinions on the proposals. An influential group in the party connected with Rinat Akhmetov and Boris Kolesnikov are not entirely against the association. "If we do not combine, then long years of political and economic chaos await the country," says PoR deputy Volodymyr Sivkovych. BYuT deputies also declare their desire for "uniting for the sake of fighting the crisis". But no-one is confident that such an association will take place.

Both fractions see the main reason for possible failure of PR/BYuT to be fast-approaching presidential elections scheduled for late October. Indeed in order to have time to to change constitution, then it is necessary to accept the first reading of the proposals some time in May. Furthermore, the proposals must be scrutinised by the Constitutional Court by September, and only in September can the constitution be accepted finally - just a month before the presidential elections. So presidential elections would be abolished at the height of an election campaign: too cynical even for Ukrainian politics.

It is hardly likely that Tymshenko and Yanukovych will refuse to participate in the elections so it would be better if they transfer elections to January 17th, which the constitutional court can do. But creation of PR/BYuT could alter the popularity of both of the two political forces amongst voters, therefore to go into coalition without being sure of the cancellation of elections via changes in the constitution is dangerous.

Apart from the distribution of power between its different branches, both PoR and BYuT in their version of the constitution, have attempted to resolve other questions. Even last year non aligned nation status was agreed for Ukraine, closing off any attempt to drag the country in NATO. But article 10 on the official language remains without changes. "Regions" agreed not to change it," said a source in BYuT. "In exchange for this, we promised the real fulfillment of European charter on regional languages, in order to remove the discrimination against the Russian language in the eastern and southern parts of Ukraine, and to give it considerably more rights than it has now," said the source...

So the possibility of "development of a joint policy by the government and president of Ukraine", considered so important by Pifer, which could perhaps occur under a Tymoshenko prime ministership and Yanuk presidency, is not that likely either.

Wednesday update:'Oboz' reports that during her meeting with PM Putin in Moscow today, Tymoshenko will ask him to "apply pressure on Yanukovych to more actively participate in the organisation of PR/BYuT"

Right nowYanukovych is slightly ahead in opinion polls, but his ratings cannot be called absolutely stable. However, despite the O.P.'s, PoR are not rejecting the idea of conducting the election of the head of state in parliament. Officially Yanukovych says he's against this, quoting the constitution which provides for national election of the president. Recently parliamentary chairman, Volodymyr Lytvyn, openly declared that he is aware of plans to introduce changes in the constitution of Ukraine concerning the method of electing the president, i.e. by election in parliament. According to Lytvyn these changes are planned to be made "by July this year, in order they be finally accepted in September." 300 votes are required in parliament in order to make changes to the constitution - PoR and BYuT together have sufficient deputies to do this.

According to information obtained by 'Kommersant', last Saturday a meeting took place between Viktor Yanukovych, first parliamentary vice-speaker Olexandr Lavrinovych, prime minister Yulia Tymoshenko. and member of the Supreme Council of Justice, Viktor Medvedchuk, during which the plans mentioned by speaker Lytyvyn were discussed.

'Kommersant' claims that Lytvyn was also invited to attend the meeting but he declined to do so. The entire encounter allegedly lasted six hours, and the results of secret O.P.'s were revealed to its participants indicating the PoR leader, having reached round two of the presidential elections, would lose both to Tymoshenko and to Arseniy Yatsenyuk.

The idea of conducting Presidential elections in the Verkhovna Rada is not new. "We proposed a similar initiative last year, but then no one supported it. But now, as far as I know, officially no-one is conducting any negotiations," said PoR spokesman Vasyl Khara. However, at that time negotiations fell through because BYuT refused to accept the conditions set by PoR and introduce corrections into the constitution concerning changes in the Presidential elections procedure.

Now, apparently, the situation changed, and supporters of Yulia Tymoshenko are ready to agree with the proposals advanced previously. "Since the majority of the population are in favour of the national election of the President, it will be complicated to explain why this procedure needs to be changed," says Serhiy Mishchenko, (BYuT), chairman of the VR legal policies committee. At the same time, he claimed that, in theory, an argument for the proposed scenario could be made based on the need to "avoiding a massacre" in the presidential elections.

Meanwhile, at a press conference, president Yushchenko stated: "One political party developed a constitution project which is not relevant to the majority of sections requiring alteration. There was [only] one aim - to plan zones of influence of two political forces for [the next] ten years." He added that the proposed changes: "Ignore the interests of the electors and [are] the formation of a model, which will lead to tyranny."

EPP president, Wilfried Martens has even suggested assembling a heavyweight crew comprising former British PM Tony Blair, former Spanish PM Jose Maria Asnar, and former Polish president Alexander Kwasniewski to help bring Yush and Yulka together into some kind of working relationship again. Yushchenko has been against the idea all along, whilst Tymoshenko has been agreeable.

Maybe its because just over a year ago, Martens, at a meeting with Yushchenko, [according to the UP article], blamed the president's secretariat of criminal acts against the Tymoshenko government. Martens allegedly declared: "Mr Baloha is a criminal!" To which Yushchenko apparently replied, "Look into my eyes! Do you consider these to be the eyes of a criminal?" "No, you are not a criminal - but the head of your secretariat is!" continued Martens.

"Financial Times" reports that the Yulia Tymoshenko government had unilaterally adopted initiatives needed to unlock an International Monetary Fund loan after MPs failed to adopt the required conditions in parliament.

It seems that the IMF Ukrainian mission head was OK with this, but, NUNS deputy, Ksenya Lyapina, who is one of Yushchenko's closest confidantes, says lawsuits against the cabinet from entrepreneurs will follow and the resolutions will be eventually cancelled by the cabinet.

* From an English nursery rhyme about a character normally portrayed as an egg sitting on a wall.

Humpty Dumpty sat on a wall,Humpty Dumpty had a great fall.All the king's horses,And all the king's men,Couldn't put Humpty together again

Monday, April 13, 2009

According to frequently heard rumours, Victor Yushchenko will not be standing in the presidential elections. This would be logical, bearing in mind that he, as a 'technical' candidate, would obtain only 2-3% of votes cast. Even with huge efforts by his secretariat, Yushchenko could maybe only gain 8-10% max. so what's the point if there is no prospect of a result?

One politolog is sure Yushchenko will not stand for re-election because no serious businessmen will provide finances for this "hopeless project". The presidential elections will take place in just over half a year's time, the "lame duck" Yuschenko will soon be a "dead duck" - his subordinates are becoming oriented toward new favorites. In a similar situation former president Leonid Kuchma constantly spread rumours of a third presidential term, then about premiership after constitutional reform.

BYuT though, are sceptical about Yushchenko's non-participation in elections. "He will stand as a technical candidate together with Yatsenyuk and Tyahnybok in order to take votes away from Tymoshenko [who counts on the same electorate]," according to one BYuT parliamentary deputy. Before the second round of voting, these candidates will propose their services to the two favorites, Tymoshenko and Yanukovych, in exchange for the premership or ministerial post. It is highly improbable, that the of Yushchenko's or Tyahnybok's entire electorate will heed their call to vote for Yanukovych, but half of voters could follow their suggestions.

However, according to the BYuT 'nardep', if parliamentary elections take place before than presidential elections, Yushchenko's may not participate in the presidential race. In this event, together with Baloha's outfit, he could collect 5% and enter the new rada, after which he would lose interest as a poor showing would underscore the futility of standing for president again.

A 'Segodnya' source in the president's secretariat claims the President has not yet did made up his mind what to do. If Tymoshenko is still premier at the time of the elections, then Yushchenko, most likely, will go for re-election.

Saturday, April 11, 2009

But there are major rumblings of discontent both within PoR, and within BYuT. Rinat Akhmetov may be becoming disillusioned with PoR leader Yanukovych, and warming toward YuVT..

And Yulia T may be flying to Moscow to meet her Russian counterpart, Vladimir P, soon. Yesterday they had a break-through telephone conversation..

'Segodnya', who refer to her as "Lady Yu", and "our premier" claim, "Decisive in the change of the relationship [between the Russian and Ukrainian government] was the position of the Russian premier, Vladimir Putin who appears to be the main lobbyist for friendship with Tymoshenko, whilst at the same time president Medvedev and number of leading Russian politicians, whose attitude to Yulia Volodymyrivna is sceptical, say she cannot be trusted..."

Thursday, April 09, 2009

"Simultaneous 'rebooting' of the presidency and parliament provides a unique opportunity for Yushchenko and Yanukovych to get rid of Tymoshenko and agree on how power will be divided up after the elections. This could be done according to the formula: 'Yanukovych - president, Yushchenko - prime minister...

Right now is not the time for Yushchenko to choose between alternatives, it is the only way to realise his own scenario - in co-operation with Yanukovych...Its possible that the talks between Viktor Baloha and Boris Kolesnikov last week were dedicated to these same themes."

She said that PACE see no judicial grounds to conduct these [presidential and parliamentary] elections on one day, because "this could lead to greater chaos than provide positives."

Naturally, the president's press office put a different spin on their boss's meeting with Mrs Wohlwend and her PACE colleague.

p.s. The latest gossipy article in 'Obozrevatel' written by the knowledgeable Sonya Koshkina concludes:

"Speaking of PR[y]BYuT in a more global context, not as a coalition but rather mutually beneficial co-operation, then the phrase of a person close to Rinat Akhmetov - "Rinat has come to terms with Yulia, as a necessary evil," has taken wing.

If by some chance presidential insignia do fall upon Tymoshenko, the Donetskiites will be able to come to agreement with her in an amicable manner.

Contact between Rinat Leonidovych and Yulia Volodymyrivna is now highly intensive and takes place not only through mediators...it goes without saying, Yanukovych cannot but know about this...he saw the PM at least twice last week."

'Segodnya' has some interesting analysis on the current political situation. Below I've loosely translated some bits:

"Only a PoR/BYuT coalition can save the RadaBYuT will be attempting to come to an agreement with Yanukovych next week. If they fail, the country will go to combined presidential and parliamentary elections.

BYuT's deputy VR vice-speaker, Mykola Tomenko, put his party in a dilemma by declaring: either everyone in the VR negotiates to work together, or everyone decides on how to conduct the simultaneous presidential and parliamentary elections. According to Tomenko, these were the conclusions supported by respondents of an opinion poll carried out by BYuT. [The straw poll at the end of Shuster's programme mentioned in my previous blog were not that clear cut.]

The official BYuT position is that they are categorically against any early parliamentary elections, probably because their ratings are falling; they will not be able to form any coalition and will lose power. [A note of caution: BYuT's ratings have generally been underated in previous elections]

"For BYuT it is important to pass an anti-crisis programme in parliament, but the composition of present coalition makes this unrealistic. Unfortunately the Communists have completely refused to co-operate, according to a source in the PM's bloc, so it necessary to convince PoR to do this - there is no alternative. The problem though, is Yanukovych's stance. Serhiy Lyovochkin, a close adviser to the PoR leader who is also well connected with the co-owner of RosUkrEnergo, Dmitro Firtash, is convinced that Yanukovych could clean up everything - winning both the parliamentary, and presidential elections. If a PR/BYuT coalition has any chance of being assembled, it is necessary to convince Yanukovych to go along with it.

The current ruling coalition has shown itself to be ineffective, but a PR/BYuT coalition on the eve of presidential elections is a myth, according one additional influential BYuT deputy. He added that although Tomenko did not state the official position of his bloc, the chances to early joint presidential and parliamentary elections are very high.

PoR spokesmen have been cautious when talking of a possible agreement with BYuT. "I support Ukraine's swift emergence from the crisis," said one of the party's leaders, Boris Kolesnikov. "If, for this to happen we have to create a coalition with BYuT, then I'm for this coalition. I consider the probability of it being created as 50 to 50. If a PR/BYuT coalition is formed, this will make early parliamentary elections unnecessary. If not, it will be necessary to hold joint elections even earlier than October 25th".

Yesterday Rinat Akhmetov [Ukraine's wealthiest oligarch, PoR's major sponsor, owner of 'Segodnya', and a close associate of Kolesnikov] spoke about possible collaboration with the Tymoshenko KabMin."I do not want to fight with the present government - I want to fight with the crisis. If the the goverment can overcome the crisis - they will they will be heroes," said Akhmetov. Kolesnikov, commenting on this turn of phrase, added: "Thus far this government doesn't deserve an illuminated scroll, never mind title of hero".

p.s. One of the matters mentioned by Tymoshenko during Friday's TV debate was the resolution by the recent G20 summit conference in London on overcoming the current global economic crisis to close down offshore financial loop-holes. This resolution will have a large impact on Ukraine's big businessmen.

Any investigation into Ukraine's industrial enterprises quickly reveals a massive web of such offshore intermediary companies. Official figures reveal that in good times Ukraine is blessed with major overseas inward investments, particularly from major countries like, for example, Cyprus...

All of this would not have been possible without major involvement from Western commercial and banking institutions. Western law firms, brokerage firms, governments of offshore zones, and banks have been exploiting for their own benefit the steady outward flow of capital too.

Monday, April 06, 2009

Viktor Yanukovych has supported president Yushchenko's call for joint early presidential and parliamentary elections.

On April 1st, the Verkhovna Rada voted, by a massive majority, for the subsequent presidential elections to be held on October 25th.

During the 'Shuster-Live' TV debate, mentioned in my previous blog, many arguments were put forward criticising the barmy idea of joint early elections at a time of the current global economic crisis which impacting so hard on Ukraine.

The president can hardly muster a dozen or more NUNS parliamentary deputies to support his cause. If he wants presidential elections before the October 25th, he should resign from his post first to force such early elections.

PM Tymoshenko easily survived a parliamentary vote of no confidence just a few weeks ago. There are no legitimate reasons for her to quit, or for early VR elections to take place.At the end of the 'Shuster-Live' show the supposedly politically balanced audience, having heard all of the arguments, were asked: 'What kind of early elections do you support?'

The responses were:

54% Do not support [early elections]23% Combined Parliamentary and Presidential22% Presidential only1% Parliamentary only

Early elections? The president cannot be serious.

'Segodnya' quotes a BYuT spokesman who speculates that early joint elections would give the president a place in the parliament after he loses the presidential elections, probably in a coalition with PoR.

Oh, and the dismissal of a Tymoshenko goverment would mean the freeing up of the 11BnCM of gas "commandeered" by the gov. from Firtash's RUE...the president needs all the help he can get to cling to any future political career...

Friday, April 03, 2009

The date for the presidential elections has been set for later this year on 25th October. Today PoR have started the 'second phase' of troublemaking by blocking the work of parliament...

PM Tymoshenko has accused PoR and the president of collusion to force early parliamentary elections onto the country yet again.

"I suspect that a limited company has been formed based on the principle: we do the blocking and you announce early elections by ukaz. It's a shame - this co-operation between Yanukovych and the president. They want to conduct early elections, and this means the country will be left dangling for 8 months, wrecking any remaining stability," said the PM.

She also declared the blocking of parliament by members of PoR is hindering the acceptance of anti-crisis laws and is directed at destabilizing the work of parliament and the political situation in general, adding that her team is categorically against any early parliamentary elections. "These irresponsible attempts have been made before, and ended with nothing. I promise them this - I will not permit them to ruin and wreck the country," she emphasized.

Party of Regions deny collusion and swear that they are blocking the VR without any deals with the presidential secretariat.

Oleksandr Tretyakov, a former close aide of president Yushchenko and a NUNS elder, commented: "Today we have became the witnesses of start of a scenario to completely discredit the President undertaken by the PoR together with technical personnel from the secretariat that are known to the entire country. They are specially provoking Viktor Yushchenko to issue and edict to break up parliament in order to provide additional arguments in favor of the beginning of impeachment procedures," adding, "It is possible to draw the conclusion that Party of Regions is intentionally destabilizing the country, [in order to] provoke serious economic and social shocks in society."

Maybe its time for a few stern 'phone calls from the 'grown-ups' at the IMF and European Commission..